Oil price - please give your opinion?

Question

Who will bancrupt if oil companies sell oil for only 25 dollars?
It sound stupit, but it is not.
Oil companies have the largest benefits out of this ******* price and most of it is benefit, then why the hell do they keep increasing the price on any bad political event?

Answer 1

Hard to believe that oil corporations would ever go bankrupt.
A barrel of oil in March 2003 was $35. Now it's $88.

Who's making that profit?

Answer 2

The price is set on the spot market. The trading pit ARA Rotterdam is full of panicky kids that freak out every time somebody passes gas.

The base price has been further raised by environmentalists and anarchists who stand in the way of building more refineries and nuclear plants.

This creates an artificial supply problem that the oil companies profit from. The environmentalists went after the oil companies and it blew up in their faces.
If you want to make the oil companies less profitable, try to imagine the REAL supply problem you will be dealing with.
See Jimmy Carter-gas lines.
Your approach would lead to the nationalization of the oil companies like in Venezuela.
Go there for a spell and get back to me on how well you think that's working out.

Answer 3

Oil companies don't set the price for oil, SPECULATORS do. Oil companies can affect price to some extent by manipulating production. Oil prices, like grain prices, are set (for lack of a better word) by traders in New York, London etc. If speculators get "spooked" for any reason, the prices go up, if they're comfortable, the prices go down. The prospect of war makes people nervous, and rightly so, but war doesn't effect the amount of oil in the ground, it does, however, effect production and transportation. People are seeing in the oil prices what we in the Ag industry have known for years, speculators control the prices of commodities.

Answer 4

speculative trading, is what drives the price of oil up.
Every political event involving an oil producing nation, is viewed as a potential threat to supply. On the commodities market, any potential threat to supply, is viewed as a chance to make a buck, off escalating prices, so traders buy it up in order to hang on to it until it does go up in price. This in itself causes supply to appear short, shooting the price through the roof.
heck, with as much money as oil companies make, I wouldn't even doubt they play a small role in this event, by buying their own oil on the markets, even after they have pinched supply at the wells, and then reselling after prices do go up.

Nearly the same thing occurs on the fuel market. Except that the refiners pinch production, which squeezes supply, and drives up their margins. Meanwhile, they blame the whole scam on environmentalists, even though they shut down many refineries, in order to squeeze supply. Since there is no economic incentive for refiners to boost supply so fuel prices will drop, they just blame environmentalists, and anyone who doesn't know better, falls for it.

why hasn't it started an oil rush, putting Americans to work in oil fields? because that would fall under the category of boosting supply, which drops prices and profit.

If speculative trading was removed from the picture, and oil companies artifically lower the price they sold oil to, to $25 a barrel, they wouldn't go out of business, because they pay a percentage of sales to the landowners they drill it from.
If the value of oil goes up, the amount the pay they landowners goes up a little. If it goes down, they amount they pay landowners goes down. its percentage based, and when it comes to foriegn markets, the people they pay are usually the governments, which just so happens to be the same government being accused currently of supoorting terrorism.

Answer 5

Who said the US consumer is entitled to cheap Energy? The Liberals for decades have said that every war is over Energy, could we finally be to the point it is now. If you compare the price of fuel one put in their car today verses the price of cars in the early 70's fuel hasn't kept pace with inflation.

The promoters of Renewable Energy haven't fully acknowledged the fact that Renewables cost more than the present cost of energy. Those that talk about Brazil don't say much about how much Rain Forest were cut down for those sugar fields. Is anyone going to ask what will happen to the cost of food when the choise is to eat the corn or put it in ones gas tank?

Solar quietly acknowledges that it is between 2 to 4 times the cost of grid power even with leaving out the cost of land it sits on.

Answer 6

Eventually oil companies would go out of business if they paid ~$60 a barrel and turned around and sold it for $25. Eventually meaning probably several years; they probably have enough cash in their treasury to stay afloat for some time. I'd imagine they have excellent credit too.

They'd never do that though: they are public companies with a responsibility to secure profit for their shareholders.

Answer 7

Hmmm 2 oil men in the White House and we wonder why oil prices skyrocket and no incentives are given for research and development of alternatives.

Answer 8

Because they are driven by money and power. There is no justifying it. They have the ability to control their own prices. Until there is another source of energy, oil companies can charge what they want.

Answer 9

The real question is, why hasn't this caused another oil boom here in the U.S.? Why are we not drilling like crazy, putting Americans to work at good wages, cutting out Middle Eastern oil?

Answer 10

if we cut the price of our oil so drastically, the companies would all go bankrupt almost instantly, which would completely collapse our economy.